Banking and telecom sectors power market to 10-month high
The WIG ended Friday up 3.2% from the previous week's close, settling at 16,792.50, with main market volume amounting to zl. 968.5 million ($248.3 million), up nearly 26% over the previous week. The blue-chip WIG20 index rose by 4.2%.
"Banks had much influence on the performance of the market as a whole," said Artur Szeski, an analyst at CDM Pekao Securities. "Bank Handlowy's increase of 23.3% was interesting as there had been no significantly good news released about it."
He added that he was a little surprised because this week shares that are held by bank employees (about 6% of the total number of shares outstanding) are expected to join trading. "Usually, the market reaction is opposite," Szeski said. "Obviously, there is something going on we do not know yet."
The banking sector's performance overall appeared unaffected by a 9.8% drop in shares of Bank Wspolpracy Regionalnej (BWR). "It is a small bank and now everything depends on the negotiations with a potential strategic investor," Szeski said. Trading in BWR was suspended for one day, Wednesday, after its auditor, Deloitte & Touche, said the bank should have more than doubled its reported net loss from zl. 32.8 million ($8.2 million) to zl. 89.4 million ($22.3 million).
"This could be a problem for the whole market, as it could diminish its confidence with small investors," Szeski said. "If BWR does not get an outside investor, it will have serious problems." Last week, the bank announced negotiations as an acquisition candidate for Deutsche Bank.
Elektrim fell 2.7% last Friday after the company had been rated at a non-investment level by leading rating agencies Standard & Poor's and Moody's. "Both agencies indicated a very high level of debt, which will further increase after Elektrim's investment plans are completed," said Pawel Zach, an analyst at Citibank (Poland). He added that the ratings for Telekomunikacja Polska (TPSA) are higher despite a $1 billion bond issue approved by shareholders last week. "TPSA's market position is much stronger and it does not have to pay for licenses to operate," Zach said.
Although down on the news, Elektrim's shares traded at zl. 55 last Friday, or 3.8% above the previous week's close. TPSA closed at zl. 25.90, a 4% increase over the week.
Other news shaping the market last week was Dutch company OPG's announcement to buy shares in pharmaceutical distributor Orfe. The sale could result in Orfe's removal from public trading.
"This shows that the foreign investors may still consider the pharmaceutical sector as attractive," said Anna Hess, an analyst at CDM Pekao Securities. "When the first quarter financial results were published, Polish investors thought that positive forecasts for the pharmaceutical sector had been exaggerated and the prices have fallen."
The price of Orfe increased by 2.64% during the week and it closed at zl. 46.70, which was 2.6% above its debut price on Feb. 18. The price OPG will pay is zl. 50.
Information on privatization of two large pharmaceutical makers had little effect on shares of publicly traded Jelfa and Polfa Kutno, Hess said. "These pharmaceutical producers do not compete much on the market," she said. Jelfa's price did not change over the week, while Polfa Kutno closed down 3.64%.
"Banks had much influence on the performance of the market as a whole," said Artur Szeski, an analyst at CDM Pekao Securities. "Bank Handlowy's increase of 23.3% was interesting as there had been no significantly good news released about it."
He added that he was a little surprised because this week shares that are held by bank employees (about 6% of the total number of shares outstanding) are expected to join trading. "Usually, the market reaction is opposite," Szeski said. "Obviously, there is something going on we do not know yet."
The banking sector's performance overall appeared unaffected by a 9.8% drop in shares of Bank Wspolpracy Regionalnej (BWR). "It is a small bank and now everything depends on the negotiations with a potential strategic investor," Szeski said. Trading in BWR was suspended for one day, Wednesday, after its auditor, Deloitte & Touche, said the bank should have more than doubled its reported net loss from zl. 32.8 million ($8.2 million) to zl. 89.4 million ($22.3 million).
"This could be a problem for the whole market, as it could diminish its confidence with small investors," Szeski said. "If BWR does not get an outside investor, it will have serious problems." Last week, the bank announced negotiations as an acquisition candidate for Deutsche Bank.
Elektrim fell 2.7% last Friday after the company had been rated at a non-investment level by leading rating agencies Standard & Poor's and Moody's. "Both agencies indicated a very high level of debt, which will further increase after Elektrim's investment plans are completed," said Pawel Zach, an analyst at Citibank (Poland). He added that the ratings for Telekomunikacja Polska (TPSA) are higher despite a $1 billion bond issue approved by shareholders last week. "TPSA's market position is much stronger and it does not have to pay for licenses to operate," Zach said.
Although down on the news, Elektrim's shares traded at zl. 55 last Friday, or 3.8% above the previous week's close. TPSA closed at zl. 25.90, a 4% increase over the week.
Other news shaping the market last week was Dutch company OPG's announcement to buy shares in pharmaceutical distributor Orfe. The sale could result in Orfe's removal from public trading.
"This shows that the foreign investors may still consider the pharmaceutical sector as attractive," said Anna Hess, an analyst at CDM Pekao Securities. "When the first quarter financial results were published, Polish investors thought that positive forecasts for the pharmaceutical sector had been exaggerated and the prices have fallen."
The price of Orfe increased by 2.64% during the week and it closed at zl. 46.70, which was 2.6% above its debut price on Feb. 18. The price OPG will pay is zl. 50.
Information on privatization of two large pharmaceutical makers had little effect on shares of publicly traded Jelfa and Polfa Kutno, Hess said. "These pharmaceutical producers do not compete much on the market," she said. Jelfa's price did not change over the week, while Polfa Kutno closed down 3.64%.
